Podcast: Grid News and Views #19

00:01:38 – 00:01:52 – Pete Aston

Hello and welcome to another Connectology podcast from Roadnight Taylor. I’m Pete Aston and I’m joined by my colleagues Philip Bale and Alex Ikonic. And we’re going to do another Grid News and View session. So welcome Philip and Alex.

00:01:52 – 00:01:53 – Philip Bale

Thanks, Pete.

00:01:53 – 00:02:18 – Pete Aston

And welcome everyone who’s listening as well. So as ever, lots going on in the world of connections, although it feels like it’s maybe slightly slowed down from the last couple of years, which is good.

But let’s start firstly talking about Gate 2 offers. So, Gate 2 offers have started coming out now. Alex, do you want to give us a bit of an update as to where you think NESO have got to then in terms of Gate 2 offers?

00:02:19 – 00:03:17 – Alex Ikonic

Yeah, so the ENA have published a very handy timeline that kind of tracks the progress of all the Gate 2 offers – I think that’s updated weekly. So, if you look at the dashboard, I think we had to look yesterday. So, we’ve got 100% of the transmission offers issued for this kind of first tranche, which should be the protected projects with 2026, 27 connection dates; and so that’s very much on track.

And distribution is kind of lagging a little bit. So, there are, I think, 39% of all relevant offers have been issued; and I think they’ve got until the end of May, I think, based on the timeline to issue the rest of them. And so that seems quite positive that it is kind of following that new timeline.

And then we’re soon going to be entering this kind of second stage where we’re expecting from mid-May to September for the transmission phase one offers to be issued. So that’s anyone that has been put in that phase one pot out to 2030. And there’s been…

00:03:17 – 00:03:23 – Pete Aston

So I guess that’s a bigger bulk of offers, isn’t it, than the protected schemes?

00:03:24 – 00:03:40 – Alex Ikonic

Definitely, yes. And there’ll be schemes that maybe had some changes as well, or kind of more changes, potentially even with connection points or dates, and definitely with like, you know, costs and connection terms. So, they’ll be the ones that we’re kind of, you know, expecting to have to look at in a bit more detail.

00:03:41 – 00:03:48 – Philip Bale

Costs in particular, Alex, I think we’re seeing some fairly substantial cost increases in the case of scope increases as well.

00:03:49 – 00:03:50 – Alex Ikonic

Yeah, definitely.

00:03:51 – 00:04:09 – Pete Aston

And how’s it working in terms of querying the offers that you get? So, if the offer comes in, you review it, you notice a whole bunch of issues, technical issues. How are you able to deal with that? How does NESO handle questions?

00:04:10 – 00:05:06 – Alex Ikonic

So for transmission offers, that’s all done with the Connections portal. So, the developer, I think, has about four weeks; this is kind of NESO’s deadline. And if you submit your queries within four weeks, then they do guarantee to kind of get back to you within that offer acceptance period.

I think from what we’ve seen and heard, there’s maybe been a bit of a mixed bag so far in terms of offers – I think we’ve definitely heard of some that have had kind of quite material errors. So, I definitely want to take this opportunity to kind of emphasise the importance of getting the TQs answered before the offers are accepted.

So I think that’s both a call to developers to kind of submit those TQs within a timely manner, but also definitely to network companies to kind of you know, answer them meaningfully and engage with customers, discuss or have calls with them where that’s necessary as well, because I think it’s very important to have these kind of ironed out before people accept their offers.

00:05:06 – 00:05:26 – Pete Aston

I guess with transmission offers; customers have that direct engagement with NESO. If it’s a distribution offer, I’m assuming any errors within the Gate 2 offers would be discussed between NESO and the DNOs before the DNOs then issue variations to their customers. Is that how it’s working?

00:05:26 – 00:05:53 – Alex Ikonic

I think, yes, ideally, yes. Obviously, the distribution customers have a much more limited time frame to accept those offers as well. So, I think, yeah, that kind of submitting those TQs is very critical.

In some cases, I guess the customer might pick something up that the DNOs maybe didn’t or didn’t realise what was an issue. So, they might need to pass those queries back to NESO and the TOs as well; so that could add a bit of delay for those projects too.

00:05:53 – 00:06:07 – Pete Aston

Yeah. So yeah, maybe that’s all we need to say on Gate 2 offers at the moment. It’s, you know, I guess this is what we’ve all been waiting for, and it’s happening quite slowly, but surely…

00:06:07 – 00:07:14 – Alex Ikonic

And I was also going to say that there have actually been a couple of Mods raised to do with the Gate 2 to whole queue process. So, I think there’s two that we wanted to kind of just touch on briefly.

So, there’s CMP 471, which is kind of in response to people not being able to make Mod Apps essentially since January of last year and there’s kind of no next window in sight quite yet at least not formally. So, this Mod is really to try and allow some contractual changes, including delaying your connection date without needing to do a formal Mod App. So that’s one to definitely keep in mind, I know, we know, plenty of projects that are kind of in that position that will maybe need to go through this process.

And there’s another Mod called CMP 473, and that’s trying to clarify which bits of the connection offers need to be updated in the Gate 2 to whole queue process, because there seems to be a bit of inconsistencies between kind of, you know, if all the documents are being updated or if it’s just kind of certain appendices of contracts. So this is just trying to make a bit more consistency between that as well.

00:07:14 – 00:07:32 – Pete Aston

Right, that sounds good. Well, it’s good that it’s been sort of talked through. Do you know what the rationale is for CMP 471? I think you said around delaying the connection date without a Mod App. Is that because of the delays with Gate 2 offers coming out in the 1st place?

00:07:33 – 00:08:16 – Alex Ikonic

So, I think it’s really because people haven’t been able to submit Mod Apps for a long time. So, I think the pause was initially introduced back in January 2025, so it meant that if your programme was delayed for various reasons, you kind of weren’t able to request a Mod App to delay the connection date and you’re still not able to do that; so you would need to wait until the next Gate 2 window, which, you know, could be Q3 of this year, but might be later.

So just kind of not knowing that you’re kind of at risk of, you know, maybe missing out milestones or even potentially making capital contribution payments based on a timeline that doesn’t really reflect the reality on the ground.

00:08:18 – 00:08:54 – Pete Aston

Yeah, thanks. Okay, that’s really helpful. Let’s move on, talk about another Mod that’s going on, which is CMP470. It’s rather difficult to keep track of all of these numbers in your head, which is, I think this is the oversubscribed batteries Mod, isn’t it?

So, yeah, and I think you’ve been involved with this on a bit, Alex, as well. So, do you want to just sort of talk us through what that is and sort of how it’s come about, and then maybe go into, you know, current progress on that one?

00:08:54 – 00:10:08 – Alex Ikonic

Yeah, so just a quick summary for anyone who’s not aware. So, this Mod is trying to bring in an oversubscribed technology commitment fee, so OTCF for short. So that’s essentially trying to introduce another securities payment, so it will namely apply to batteries kind of in the first instance but in future, you know, could apply to any oversubscribed technology.

So, the aim of this is really to kind of encourage attrition where the queue has been oversubscribed compared to, you know, Clean Power 2030 targets. So, the idea is that if oversubscription reaches a certain threshold, then this will be triggered, and based on how much of a subscription falls or doesn’t fall within the next kind of, you know, six monthly period, it might ramp up or it might stay the same. So, the idea is that, you know, it could kind of provide more incentives for people to assess their projects and leave the queue.

So, the current idea is that it starts from 3K per MW, but it might ramp up to 25K per MW. So, it could be quite a hefty sum, and it would be refunded once the project connects. So yes, you’re right there.

00:10:08 – 00:10:11 – Pete Aston

But if the project was cancelled, then it wouldn’t be refunded.

00:10:11 – 00:11:13 – Alex Ikonic

Yes, yeah, so it would be like a cancellation charge, an additional cancellation charge. So, we recently had a work group consultation for that, so we’ve had quite a few responses from the industry – I think it’s fair to say there’s a bit of a split, definitely within the work group, but also in the industry responses about whether people are for or against this and even on individual aspects of it. So, is that fee too high or is it too low? I think we definitely haven’t reached a consensus within this.

So now we’re back in the work group, kind of having a bit more discussions on that, and I think the next thing to look out for will be the code admin consultation, which will be, I think at the start of June or early June. And then the idea is to kind of finalise that and to send it off to Ofgem and the proposer who are Field, they’re hoping for a decision this summer on it and potentially implementing it from January of next year.

00:11:14 – 00:11:42 – Pete Aston

So I guess this is particularly relevant for battery developers who think they’ve maybe got away with it because they’ve got in the queue, even though the queue’s now oversubscribed, but they’re sort of, they’re going to get a Gate 2 offer there, you know, they made the cut, but now this is coming in and this could potentially, I guess, be the nail in the coffin for battery schemes that were marginal perhaps already, and this could move the edge perhaps.

00:11:43 – 00:11:46 – Alex Ikonic

Yes, I think I think that’s the idea behind it, yeah.

00:11:46 – 00:12:57 – Philip Bale

I think the challenge with this is that it’s quite a crude instrument, especially as numerous developers don’t have significant financial backing and they tend to develop the projects very differently. We said it before, it’s a very different skill set in terms of taking a project and developing it and taking it through, to then building it and then owning and operating it – it’s a very different model.

So, we tend to see a lot of battery storage projects being developed by relatively small, nimble companies who are able to do that, who then often sell their projects to other parties who then come in and take over. The PCF will probably not concern some big owner operators quite as much as some relatively small developers.

My concern with the project commitment fee is that because it is quite a crude tool, you could end up weeding out projects which are good projects and any project can be at risk of having a problem at a later stage. So you may be artificially culling some projects because their developers can’t pay the project commitment fee rather than it is a bad project which should be removed from the queue.

00:11:21 – 00:12:03 – Pete Aston

Well, I think that’s a good point to bring up as well, Philip, because you’ve got, so now, if this Mod was to go through, a battery project would then potentially have its, you know, normal securities cancellation liabilities for, you know, works that are happening for that particular scheme. And then layered on top of that, then you could have this oversubscribe technologies sort of fee as well — So, it’s quite significant and that could all add up.

And Alex, you mentioned about the fact that there was a, within this model, a threshold beyond which it would kick in, and we’re effectively way beyond that threshold already, aren’t we?

00:13:52 – 00:14:43 – Alex Ikonic

Well, so we are in terms of the amount of capacity that is going to get a Gate 2 offer – that’s definitely way above the threshold. But I guess the thing to bear in mind is that not everyone is going to accept their Gate 2 offer. So, we still don’t know how much kind of oversubscription we really have.

So, there’ll be lots of projects that applied in the last couple of years that, you know, never really had full sight of their kind of whole connection terms. So, there’ll be people that applied under the, you know, two-step offer process and had transitional offers with kind of no securities, no certainty in grid costs, and they might have had connections to connection nodes; so that there’s lots of people that will be getting that Gate 2 offers and they’re going to be in for quite a shock and just won’t be able to accept them.

So, I think it’s very important that we wait until the queue is kind of fully formed to see how much over subscription is really an issue, I’m not saying it won’t be entirely, but I think there will definitely be a margin.

00:14:43 – 00:15:15 – Pete Aston

Yeah, yeah. Yeah, it’s a good point. I guess no one’s going to know that answer until we sort of get close towards the end of this year and lots of Gate 2 offers have been out for the sort of full three months and accepted or not.

So yeah, well, it’ll be interesting to see the stats from the ENA and others as to, you know, how many, you know, the percentage of offers that getting accepted, so, so that would be really interesting to see.

00:15:15 – 00:16:01 – Alex Ikonic

Yeah, and I think that’s kind of our stance on this Mod as well, is that it’s a very complex issue and we feel it’s a bit premature because it is based on quite a few assumptions and we just don’t have enough visibility of enough data to be able to properly assess it.

I think it’s also important to note that there’s quite a few other actions that are being considered by NESO, the TOs, Ofgem and DESNZ on how to address the battery over subscription issue. So, if we kind of do both, there’s a risk that we’re kind of overcorrecting it by quite a big margin. So we just don’t think it’s quite the right time to do this Mod, because I think we really don’t want to end up in a position where, you know, we have to raise another Mod in a year’s time to amend or get rid of this one.

00:16:01 – 00:16:27 – Pete Aston

And that just wouldn’t be a good use of industry time and effort. And I guess, slightly further out on the horizon, I think it’s next, towards the end of next year, the SSEP, strategic spatial energy plan, gets published – which potentially could increase the amount of batteries required than are already in the queue. So, you know, we wouldn’t want to kick a load out only to find that we needed to get more back in again.

00:16:27 – 00:16:29 – Alex Ikonic

Yeah, exactly.

00:16:30 – 00:16:32 – Pete Aston

Yeah, okay, thanks, Alex. There’s lots going on with that. I think next, we want to just quickly touch on demand Connections Reform. So obviously Gate 2 is going through at the moment is mostly around generation projects, although lots of transmission connected demand schemes will receive Gate 2 offers this year and early next year; but that wasn’t really the focus of Connections Reform, as we all know.

But Ofgem, government, NESO is now talking about demand Connections Reform, mostly to look at the oversubscription, another oversubscription of data centres in the queue. I guess data is a little bit woolly, but it’s, I think, the figures published were at least 50 gigawatts worth of data centres in the queue, perhaps more. And so there have been a couple of consultations earlier on this year, one from Ofgem, one from the government on how they address this, how they try and manage the queue. So, it’s going to be interesting to see what comes out of that.

I’ve been sitting on Ofgem’s CURATE Advisory Group, which is looking at the CURATE pillar, one of three pillars that they were looking at, which was mostly looking at the implementation of a financial mechanism for, as we were just talking about for the batteries, but something similar for potentially for data centres. So, adding a securities type fee to be able to either join the queue or stay in the queue for data centres – probably not quite as far advanced as the Mod you were just talking about, Alex, but I guess that feels like an issue that might come up later on this year for demand projects, particularly data centres, so worth just keeping an eye out for that.

00:18:26 – 00:19:43 – Philip Bale

Out of interest on that, Pete, with the generation projects and battery storage Connections Reform, it did a first needed, first ready, first to connect with a focus on milestones of have you applied for planning, have you got planning? But there’s a vast difference in a project which is applied for planning, got planning, done its engineering design, got on ICPs, EPCs, ordered long lead time items, has finance in place for that project to someone else who has planning and then has done zero towards the technical development of their project since then.

So, we’re seeing a lot of projects which have got early connection dates, which are not going to reach those connection dates because of Gate 2 causing uncertainty of what offer they’re going to receive, which then means those projects are going to be looking at pushing their connection dates back on account of not being able to proceed at an acceptable risk. And then there are some other projects that still have late connection dates that want to accelerate, that are fully ready and chomping at the bit, that haven’t been able to accelerate their project.

Do we think for demand reform, they’re going to focus much more on who’s actually ready more than what was done for the generation projects?

00:19:44 – 00:21:05 – Pete Aston

Yeah, well, the consultations that came out, were starting the conversation really about what determines a viable project for as a demand customer and you know similar sorts of questions as to what were being asked about the generation projects like around planning and so on.

But some really interesting ones that were being explored around have you got an end customer in place? So, if you’re a data centre customer, do you have an actually an end customer in place? And there’s some, the discussions have been really interesting as to whether or not that’s a good measure. Because of course, if you have got an end customer in place, it’s a really good measure that you’re ready to go. But lots of the developers are saying, well, a lot of them develop at risk and with the approach that build and they will come. Because, you know, in a sort of growth data centre market, maybe that’s true. But is that always going to be true, even, you know, for the next 5 to 10 years?

So, I guess there’s lots of uncertainty and a lot of the developers have been saying that at connection application stage, there’s no way that they would ever have an end customer in place. But somewhere between application stage and energization, they will. But, you know, what’s the most appropriate point to whether to put that milestone in?

00:21:05 – 00:21:36 – Philip Bale

So, yeah, I think there’s lots of discussion happening around it and no clear answer on that yet. The questionnaires that were asked were looking a lot deeper than it did for the generation projects. What’s your CapEx? What’s your DevEx? Have you got the money to fund this or not? Where are you getting the money from?

Those are really telling questions, which hopefully means there’ll be more of a focus on which of the projects are more likely to proceed to allow more acceleration for those projects that have their ducks in a row and encourage other customers to do the same in order to accelerate their project.

00:21:36 – 00:22:47 – Pete Aston

Yeah, absolutely. Moving on but still staying with demand; a bit later on this year, perhaps, maybe next year, there are going to be some demand registers published. So just as there are generation registers published, transmission and distribution, there are going to be similar registers published for demand, which I think is going to be great, and it’s going to be, you know, open up that transparency that everyone’s been asking for on demand projects and which will hopefully help demand developers to make more informed decisions about applications in the future.

So, we’re not quite sure perhaps when this is going to be issued, but we know there’s been working groups trying to talk through exactly what should be included within these registers. So that’s something to watch out for a bit later on this year.

Philip, coming on now to ANM, you’ve promised us, you promised Alex and I some ANM real life horror stories. So, you know, we’re waiting for some good ones now, Philip.

00:22:47 – 00:27:48 – Philip Bale

Yep, so ANM, Active Network Management, increasingly always used probably more than a decade ago, more like 15 years ago, started as an innovation project in order to try and accelerate projects to make use of the diversity between generation and demand sources. And I think arguably it’s been one of the most successful innovation projects in moving things and transitioning very closely and very quickly from being an innovation project to business as usual. And I think every DNO is now offering ANM – we finally get around to everyone doing it.

A few bits of news first. So UKPN have had their Connections Lab; it’s a tool that they have built that allows people to go through and run curtailment assessments for their project and see what the risk is. NGED at the end of March has released their own curtailment assessment tool, which means existing schemes can go through, put their connection date, their crown number as it’s called in, and it will be a basic highlight of the risk for thermal constraints.

What’s interesting is that we are increasingly being asked to investigate ANM curtailment risk for connected projects, some of which are actually seeing far higher curtailment in real life than was ever forecast – lots of reasons, some of which are very interesting, some of which I can’t get onto on this call. But it’s something that I think if you have a project with ANM, these are the things that you’re going to want to consider and understand, and I think where the industry needs to start answering some of the very difficult questions.

So first of all, if you have a project with ANM and you have a contract, which is your Connection Agreement, do you even know what your LIFO position is for your project? Do you have it contracted? Who is ahead of you? Is it written down? Has the DNO even committed to a LIFO methodology? Can they change their mind? And quite a lot the connection agreements are very, very light on this information, which doesn’t have anything in there.

Do you know what the rules are for connections, where the DNO has a limit, where they connect schemes with ANM and without ANM? We’ve seen network operators where they’ve published and state there is a limit, and then when you dig in the data, you can see quite high numbers of schemes that are substantially higher than that limit that have been connected without ANM. And the question is, is that fair? And then what happens when that customer with ANM starts to see constraints that’s come as a result of the DNO not following their rules, but the rules that are out there and stated are not usually written down in the public domain and they’re certainly not in your contract, so where is the risk and where’s the responsibility and what should happen when customers are connecting and have no control over someone else doing something that materially affects your curtailment risk.

The next bit is, do you know where you have ANM? Most connection offers are written incredibly broadly and states that you have active network management, which can be used on everything for any reason – no limit on circuits, no limit on whether it’s thermal only. And so you could find over time that things that the network operator never envisaged would be a constraint for your project, all of a sudden could be a constraining point. And there again, is that right? If something that pops up five or even ten years after a project is connected, is it right that all of a sudden that project sees constraints on that, potentially also for a mistake that the DNO has made that they haven’t wanted to go back and fix.

One of the things that we’ve done recently is a project which is connected, which has an ANM caveat, and there is a voltage risk on that network. The current ANM scheme is only monitoring and managing thermal constraints, and when we dig into the risk levels, the network operator isn’t able to articulate what policy they would follow, what would be the rules around voltage ANM, but also aren’t in a position to contractually rule out that in the future when they have more advanced ANM schemes, that that scheme in the future wouldn’t be constrained, but with absolutely no understanding of what the risk is and how it could be quantified.

So the question is, is that right? If you do have a scheme that’s connected that has a voltage issue where there’s either a statutory limits issue or there’s a tapping issue with a transformer downstream, is it not more right to have the generator operate in a voltage control mode? So, you’re using reactive power to resolve the voltage issue rather than thermal. There again, things that network operators for connected projects that have this risk aren’t able to explain what level of risk these projects could face in the future.

00:27:49 – 00:28:01 – Pete Aston

Would you say, Philip, based on this, that the technical development of ANM has now happened faster than the commercial development?

00:28:01 – 00:29:07 – Philip Bale

Absolutely. I think probably what I’d say is that the technical development of ANM has exceeded the policy development and the rules more than the commercial. And I think there is a serious look at, I know my final point was, has ANM lost its way, is there a fair level of risk? Should customers be expected to sign a blank cheque where they have absolutely no control over those schemes?

I think just a couple of other points that I’ve seen as well is that where you are undertaking curtailment assessments, either for projects that are connecting or connected, you have to be incredibly careful with the data that’s being used. It is great that the network operators are publishing far more data on their network. Nearly every project that we look at, there is some form of serious data error issue where there’s a problem, where it is incredibly hard to spot, but it makes it very, very challenging to understand the risk for those projects.

00:29:07 – 00:29:15 – Pete Aston

And the, and that data error being material to the, you know, really material to the sort of level of curtailment.

00:29:15 – 00:30:29 – Philip Bale

Yeah, we’re talking ANM queues not being clear, not being published, not being released in a way that’s clear for people to assess the risk. We’re talking about schemes having incorrect install capacities and export capacities that don’t reflect the actual contracted position. We’re talking about power flows through circuits being materially off compared to what they should be and what would be logical for those networks. So yeah, some tricky stuff that’s out there.

And then one last thing is just people have to understand that when you’re connecting these projects, that there’ll be an evolution; so, when we have BSP transfers between GSPs, primary transfers between BSPs, it’s not unusual, it’s not all of the time, but permanent transfers. How does the network operator clear that and make sure that the ANM risk is fair, especially if you have two different customers, two different BSPs, normally are two different GSPs, both of which are lucky enough to have a statement that says that the network operator will follow a LIFO position. But what happens when they merge BSPs and how do they do it fairly? And some people will win and some will lose.

00:30:29 – 00:30:42 – Pete Aston

Yeah. And the question I was going to ask was just around Gate 2. Are we expecting, you know, LIFO positions to change, curtailment to change, you know, within the Gate 2 offers that come out?

00:30:43 – 00:31:22 – Philip Bale

It’s still not clear for anyone that receives a Gate 2 Phase 2 offer whether their ANM position will change, and that can be really material if you, as an example, are a battery storage developer who are connecting in an area where you have wind schemes, the wind projects could be accelerated forwards, the battery schemes could be pushed back, you could see people that applied after you ending up being contractually ahead of you in the queue.

And for that scenario, I could see that export yields based on wind being predominantly a winter export correlating with when a battery might want to also be exporting – there could be some issues.

00:31:22 – 00:31:31 – Alex Ikonic

I was going to say, I was going to say, I do think some DNOs have said that they will restructure the LIFO queue positions in line with the new queue, so that is quite a big risk for those phase 2 projects.

00:31:32 – 00:31:53 – Pete Aston

That’s the point I was going to make, because the rearrangement of the queue within phase 2 of Gate 2 was published, that was a CNDM thing, wasn’t it? That was definitely going to happen, but CNDM didn’t talk about the LIFO stack. So that was like almost down to the interpretation of the DNOs, wasn’t it as to how should we play this, what should we do?

00:31:53 – 00:32:02 – Philip Bale

There have been working groups on it to try and get consistency, but I think not all of the DNOs are consistent on what the answer should be.

00:32:02 – 00:32:19 – Pete Aston

Yeah, thanks, Philip, that’s really interesting. So, yeah, I guess the point of that is dig deep into your ANM offering that you’ve got, because it’s not always as clear as maybe it first appears.

00:32:19 – 00:32:26 – Philip Bale

Including if you have a project that has zero curtailment risk at the moment, that doesn’t mean that there won’t be something that comes back to bite later on.

00:32:26 – 00:32:26 – Pete Aston

Yeah.

00:32:28 – 00:32:29 – Alex Ikonic

That is a scary story.

00:32:29 – 00:33:27 – Pete Aston

Yep, yep. The phone is going to start ringing, Philip, as soon as this podcast comes out.

There was just a couple of other things we were going to mention, because time has run away with us on the podcast now, but DNOs are currently preparing their ED3 business plans. I think first drafts go out to Ofgem in July, so just a couple of months, and then final drafts to Ofgem in December, which is a big challenge for DNOs as they don’t really know which customers are going to be in or out because of Gate 2. So, they’re trying to develop a business plan for 2028 to 2033 without really knowing the basis on which they’re supposed to be developing it – so pretty challenging for them at present.

And then we had one last thing about transmission delays. We’ve seen some delay notifications come in. I think, was that you, Philip, was mentioned that. Yeah, do you want to just say anything else on that?

00:33:27 – 00:34:28 – Philip Bale

Yeah, I think it’s just a concern. So, there is a huge amount of work that needs to be done, both at distribution and transmission, and where you’re seeing projects already receiving transmission delay notifications, which are then being passed on to customers delaying their connection dates. I think this is something that we’re going to end up picking up more and more on because there is a limited amount of people with the skill sets to deliver all of the work that needs to be there.

And so, the hope is that there is a way of going through and resolving it and structuring it and doing these works, but we’ve already seen transmission delay notifications for projects, and I think it’s going to become more apparent. And obviously that’s incredibly challenging for people that have already placed orders for their long lead time items, already committed, already been delayed from a CP2030 Gate 2 perspective to then have a final kick of another delay to their project – incredibly challenging commercially for those projects and those developers.

00:34:28 – 00:34:47 – Alex Ikonic

And that has been something that was kind of touched on in the Ofgem end-to-end review about bringing in kind of new incentives or potentially penalties for that kind of situation exactly. So, I think it’ll be interesting to see over the next, you know, couple of months or whatever the time scales are for that and how we can kind of address that as an industry.

00:34:47 – 00:35:12 – Pete Aston

And I was just going to say, it’s frustrating that there’s currently an asymmetrical approach. So as the transmission owner, if they delay the project, no problem. If the customer delays the project, well, they have to pay delay charges, you know, and so it’s which can amount to huge amounts of money. So yeah, it would be good to see some change around that so that there’s at least some comeback on the TOs if they delay.

00:35:12 – 00:36:26 – Philip Bale

It is interesting, Alex, that you made the comment around that Ofgem made the sort of case of sort of trying to hold the TOs to account for the delivery of projects. One of the things that I’m always staggered by is that actually I think the developer community is quite passive with this; they take the delays relatively, well, far better than I would if it was my projects that I was invested into.

I do wonder if that’s going to change, whether people are going to become slightly more vocal on these things and more will get escalated and whether Ofgem are ready for the barrage of people coming through and the more there are issues, the more ways of trying to resolve them.

I think the concern for a lot of developers have been that if it is escalated up to the authority, it could take a significant amount of time to resolve going through that process, which actually means the project might even be connected before you can have a meaningful conversation. So, I think that if there is an element of Ofgem wanting to have meaningful conversations with developers, there needs to be that quick, sure way of making sure that developers can access the authority and that it can be resolved relatively quickly in order to not have a material impact on connection dates.

00:36:26 – 00:36:28 – Alex Ikonic

Yeah, agreed.

00:36:28 – 00:36:39 – Pete Aston

Yeah, good point. Right, we’ll end on that. Thank you, Alex. Thanks, Philip. Thanks everyone for listening, and we do hope you join us again for another podcast. Thanks, and goodbye.

00:36:39 – 00:36:40 – Philip Bale

Thanks, both.

00:36:40 – 00:36:41 – Alex Ikonic

Thanks, bye.